Recession Second Wave - Mid-Corporate?

In past recessions corporate failures have generally gone in two waves. First the big end of town of which our current predicament is a fine example. The second wave sees the mid-corporate sector struggling. As I mentioned last week bankruptcies are starting to increase and businesses seem to be less able to hold onto employees by turning them into part-time workers. As unemployment increases it will on the one hand reflect and on the other hand cause this sector to get into increased difficulties.

What may hold back, or slow down this process will be the strength we're seeing out of China and the resilient consumer confidence reflected in recent surveys.

If unemployment does increase and the mid-corporate sector does find itself in difficulty then another easing will be on the cards and longer (3-5 years) rates will continue to grind down after their premature sell off of last month.